Self-Employment is On the Rise and Changing How Americans Work

About 40 percent of the adult workforce is working or has worked as an independent. By 2020, that number is expected to jump to 50 percent.

If they do it right, freelancers get to choose their hours, environment and clients. If they do it wrong, they can end up dealing with a cash-strapped hustle.

To be successful, freelancers need to understand their capacity, differentiate themselves and focus their services to complement their supreme strengths, said Jaleh Bisharat, senior vice president of marketing at Elance-oDesk, a California-based company that connects businesses to freelancers while providing related services.

?One of the big shifts we are seeing in the future of work is that businesses of one will start to be the normal,? Bisharat said. ?They will be freelancers, and they will also hire freelancers to help them with the part of their businesses that they don?t understand.?

The advantages and disadvantages of freelancing are freedom and control. There is no paid vacation or sick time, and there are no opportunities to slack off.

?If you are failing, there is no one to blame but you,? said Jill Jankoski of Raleigh, who has been providing virtual administrative services since 2008.

Some freelancers turn to services provided by companies such as Elance-oDesk, which will bill clients and guarantee payments in exchange for a percentage of the transaction. Others figure it out job by job, build partnerships or network with other freelancers.

?Not being tied to a desk has its challenges, namely staying organized,? said Margaret McNab, 31, of Durham, who offers marketing and public relations strategy along with business partner Christin Prince through their firm Prince McNab.

McNab uses applications such as Shoeboxed and Ronin to keep her receipts and finances organized.

The major challenge freelancers face is getting that first client, Bisharat said.

To decide how much to charge, freelancers can look online and explore the rates of people with similar backgrounds looking to serve similar roles.

Bisharat said she knew one freelancer who started charging $15 an hour with a goal of getting her first client and endorsement. About a month later, she was up to $45 an hour.

?You are going to want to raise it as you can,? she said, but that first endorsement is ?worth its weight in gold.?

Obtaining and amplifying endorsements are an essential part of a freelancer?s business, Bisharat said, especially if they connect with customers online.

Once they have a client, she said, communication is key.

Saleem Reshamwala, a freelance filmmaker who runs his firm KidEthnic out of startup incubator American Underground @Main Street in Durham, said one of the biggest mistakes he made in the beginning was not writing out a contract defining the work and payment.

His process improved greatly after he made friends with a successful filmmaker who shared templates for contracts and invoices.

Over time, Reshamwala, 35, of Durham learned to approach projects in two phases.

The first phase is exploration, in which he and the client define the project and its ultimate goal.

The second phase is execution. Breaking it up, he said, helps the client to see work is being completed long before the filming starts.

Freelancers also have to be clear about what they can deliver and when, Bisharat said. If there is an issue, communicate the challenge and a potential solution early.

If the client starts to change or add to the job, a freelancer should use diplomatic language to address the situation, Bisharat said.

Freelancers should also have basic business plans outlining how much they need to make, how they are going to differentiate themselves from others and how they are going to promote themselves.